MONTREAL — Canadians remained cautious about making large purchases in April as consumer confidence returned to a trend of slow improvement this year, according to the latest survey by the Conference Board of Canada.
After three consecutive months of increases, the index fell to 75 in April, down 4.5 percentage points from a surprisingly positive March, the think-tank said Tuesday.
“Rather than focus on this particular month, if you focus on the results over the course of the first four months of the year the results have been moderately positive,” said economist Todd Crawford, the report’s author.
The drop in April was driven by strongly negative responses on future job prospects and attitudes towards making big purchases.
Those questioned who believed there would be fewer jobs in six months rose to 27.8 per cent, more than offsetting the 20 per cent who expected to see more jobs.
Negative attitudes about employment were at their highest level in more than two years, but only slightly worse than what was recorded in December.
The survey measured a pessimistic jobs outlook as the Canadian economy added 82,300 workers to the labour force in March, reducing the unemployment rate to 7.2 per cent.
The Conference Board report said all regions of the country were more pessimistic in April except Quebec, where the confidence declined in March.
The attitude of Canadians towards their financial situations improved slightly, but was still weak compared with the depths of the most recent recession.
Those who expected their family’s finances to improve over the next six months was 23.4 per cent, a drop of 0.6 percentage points from March and down from a year ago.
Meanwhile, the proportion of respondents who said they expected their finances to worsen climbed 1.4 points to 18.7 per cent.
Given the pessimism, the Conference Board said it’s not surprising that fewer Canadians said it’s a good time to make major purchases.
The level of consumer confidence is important because consumer spending drives 62 to 65 per cent of the Canadian economy, Crawford said.
Nearly 41 per cent of respondents said it was a good time to purchase a new home, car or other major item. That was down 3.4 points from March.
Those who said it was a bad time for a major purchase climbed 3.6 points to 48.3 per cent.
“There are enough reasons to be cautious out there that consumers are wise to take notice and be cautious about their outlook not only for the future job market but also major purchases and to be wary about their finances,” added Crawford.
Overall pessimism was most prevalent in Atlantic Canada where rising concerns about job prospects drove the regional index down 11.6 points to 69.2.
British Columbia’s index fell nearly 10 points to 88.4, while Ontario’s index dropped 6.5 points to 62.3. The Prairies fell 2.1 points to 105.2.
Quebec bucked the trend this month as its index rose 2.4 points to 68.1. But nearly 30 per cent of residents said they expected fewer jobs in six months’ time.
Meanwhile, Americans’ confidence in their economy held steady in April from the previous month despite rising job cuts and falling home values, said a separate report from a private research group.
The U.S. Conference Board said on Tuesday that its consumer confidence index dipped slight to 69.2.
Crawford said the results in both countries showed consumers are cautious but steady in their confidence levels.
The telephone survey of 2,000 Canadians was conducted April 4-12 and was said to have a margin of error of plus or minus 2.2 percentage points.